Buried treasure: An overview of news from active diamond companies

The discovery outcrop at Adia Resources' Lynx project in Manitoba. Credit: Adia Resources

An overview of the latest news from active diamond explorers, developers and miners in Canada, and Canadian-listed companies working abroad.

Adia Resources

This spring, Adia Resources completed an initial diamond drilling program and ground gravity survey at its Lynx project near Oxford House, Man. While the company had planned to drill eight holes totalling 3,000 metres, a late start and mechanical issues limited the program to three holes totalling 1,258 metres.

Adia expects to receive microdiamond results in the fourth quarter.

The company says the drill intercepts and survey support the interpretation of a diamondiferous ultramafic unit at least 3 km long and up to 315 metres wide.

Adia also reported results from two 20-litre beach sand samples taken at Lynx in 2018. A total of 163 diamonds in the +0.3-0.5 mm size fraction were recovered, as well as seven in the +0.5-1 mm size fraction. In the first sample, 58% of the diamonds were colourless and 40% were either dodecahedral or octahedral.

Adia raised $3.5 million for exploration at Lynx in February. The private company’s largest shareholders are Altius Minerals (TSX: ALS) and De Beers.

Surface sampling at Lynx has identified multiple kilometre-scale diamondiferous volcaniclastic units on the property.

Arctic Star Exploration

Arctic Star Exploration (TSXV: ADD) announced the discovery of two new kimberlites at its flagship Timantti project near Kuusamo, Finland, in July. The Plug and Karhu kimberlites, which the company describes as heavily weathered and clayey, were discovered by trenching with an excavator. The new finds are located within 450 metres of the Vasa dyke swarm discovered last year, but do not appear to be physically connected to them.

They are about 2 km north of the Black, Grey and White Wolf kimberlites, which have all proven to be diamond-bearing. The company notes that it is encouraged by sampling results that have consistently reported more than 100 stones per 100 kg.

De Beers

As part of its resource expansion program at its 51%-owned Gahcho Kué mine, in the Northwest Territories, De Beers and partner Mountain Province Diamond (TSX: MPV; NASDAQ: MPVD) made a new kimberlite discovery in June.

The Wilson kimberlite is 200 metres away from Tuzo pipe, which is slated for development later in the mine plan, and located within the Tuzo pit design limits. More than 22,000 metres of core has been drilled as part of the resource expansion program. Another small pipe – Curie – was discovered near Tuzo in 2018.

Company-wide, De Beers expects to produce 31 million carats this year, as it continues to produce to weaker market conditions. The miner’s production in Canada decreased 34% in the third quarter (from a year earlier) to 800,000 carats due to the closure of the Victor mine in Ontario mid-year.

On a different note, Gahcho Kué is at the centre of work De Beers is doing on carbon sequestration. In July, De Beers Canada received a $675,000 grant from Natural Resources Canada for its company-wide global carbon capture research program. The funding, from NRC’s Clean Growth program will support further research at Gahcho Kué on the potential to store large volumes of carbon in processed kimberlite through mineral carbonation.

De Beers says laboratory experiments have yielded success and it will be following up with larger-scale field demonstrations at the mine. The company is working with academics from the University of British Columbia, Trent University, the University of Alberta and Institut national de la recherche scientifique (INRS) on the project.

Diamcor Mining

Diamcor Mining (TSXV: DMI) reported improved volume of carats of rough tendered, sold and delivered in its most recent quarter. The company sold 8,584.62 carats in total, with an initial 3,759.62 carats of rough generating US$569,059 or US$151.36 per carat.

Diamcor recently brought on a new operational team to refine the processing facilities at its Krone-Endora project in South Africa. As part of an evaluation of the plant, the team processed historical tailings and previously stockpiled material, identifying areas for improvement. The company reports new operating procedures are being implemented as a result.

Diamcor closed a $1.1-million term loan financing in August to deploy additional equipment to support increased processing volumes at Krone-Endora and for working capital.

Dunnedin Ventures

Dunnedin Ventures (TSXV: DVI) has homed in on a 3-sq.-km area of its Kahuna project in Nunavut as the possible source of a discrete trend of high-quality diamond indicator minerals found in the Josephine Target Area (JTA) of the project.

The company collected 750 till samples in late 2018 at the JTA. In March, it reported that 109 priority samples had been analyzed and the results suggest the source of the indicator minerals is in the 3-sq.-km area located at the northwest up-ice end of the JTA. The company says the next step will be to define pipe-like targets for its next exploration program.

GGL Resources

In July, GGL Resources (TSXV: GGL) conducted field work (heavy mineral sampling and till suitability mapping) at the ZIP project, part of its 100%-owned PGB property 70 km west of the Ekati mine in the Northwest Territories.

The work was completed in collaboration with the Northwest Territories Geological Survey (NTGS) as part of a regional-scale program aiming to develop and release new sets of geoscience data to further exploration in the area. GGL also has data from a low-level airborne magnetic and electromagnetic survey it previously conducted at the property.

At Arctic Star Exploration’s Stein project, in Nunavut, GGL carried out a ground geophysical survey this summer and identified multiple “compelling” targets with kimberlite-like signatures. The company is following up with further modelling and prioritization of targets for future drilling.

GGL has the option to earn a 60% interest in the project by discovering an in situ kimberlite. The project is located 45 km from tidewater on the Southern Boothia Peninsula. The project has not yet seen drill testing.

Lithoquest Diamonds

After completing an initial drill program on its North Kimberley project in northwestern Australia last year, Lithoquest Diamonds (TSXV: LDI) has made two new discoveries at the project this year.

Its second drill program, which started in October, saw 928 metres drilled in 11 reverse-circulation holes on three targets. Kimberlite was intersected on two of the targets. The third did not return kimberlite, however, the company still believes it to be prospective. Only one hole was completed on the target due to time constraints.

Early this year, Lithoquest also announced results from drilling on the 1804 kimberlite, the first kimberlite discovered at North Kimberley. No microdiamonds were found in the core.

Microdiamonds have been recovered from a sample taken from weathered outcrop at the project, and from stream sampling.

Margaret Lake Diamonds

In May, Margaret Lake Diamonds (TSXV: DIA) completed ground, magnetic and electromagnetic surveys at its 60%-held Diagras property in the Northwest Territories. Arctic Star Exploration holds a 40% interest. Diagras hosts 23 known kimberlites and the surveys were focused around the known kimberlites and airborne geophysical anomalies with kimberlite-like signatures.

Diagras is on trend with the Diavik mine, which is just 35 km away. The company says that with three seasons of geophysical work having been completed, it now has enough drill targets to justify a drill program, which is slated for spring 2020. Seven targets have been identified for drill testing.

Mountain Province Diamond

In the third quarter, Mountain Province Diamonds (TSX: MPVD; NASDAQ: MPVD) reported lower production and sales prices for diamonds from its 49%-owned Gahcho Kué mine in the Northwest Territories. Production was down 16% from the year-earlier quarter at 1.5 million carats recovered at a grade of 1.72 carats per tonne.

Production for the year is still on track for 6.6-6.9 million carats. The mine is operated by 51% owner De Beers.

Achieved prices declined to US$52.5 per carat from US$72.5 per carat in the same quarter of 2018.

On the marketing side, the company is looking at ways to get higher prices on diamonds with fluorescence, which Gahcho Kué is known for. The junior plans to launch a marketing initiative before the end of the year.

North Arrow Minerals

This spring, North Arrow Minerals (TSXV: NAR) began an engineering design and costing study of a small-scale, mobile diamond recovery plant to facilitate a planned 10,000-tonne bulk sample at its Naujaat project in Nunavut. The company is investigating design options that would use TOMRA XRT sorting technology to recover diamonds greater than 3 mm (over 0.5 carat). Such a design and its onsite location would be expected to reduce costs while focusing on the higher-value diamonds that would make the most difference to the economics of the mine.

In July, the company announced that its joint venture partner at the LDG project, Dominion Diamond Mines, hit kimberlite in the first hole of a summer exploration drilling project. LDG is close to Rio Tinto and Dominion’s Diavik mine; after the current program is complete North Arrow will retain a 21% interest.

North Arrow also completed a till sampling program this summer at its Loki project in Las de Gras, N.W.T., and sold an additional 0.5% royalty to Umgeni Holdings for a total of 2%.

Olivut Resources

In September, Olivut Resources (TSXV: OLV) completed a reverse-circulation (RC) drill program at the Seahorse project, part of Talmora Diamond’s (CSE: TAI) Horton property in the Northwest Territories. Olivut has the right to earn up to a 50% interest in the project by spending $1.2 million on exploration over two years and making a $200,000 payment to Talmora. The earn-in agreement was signed last summer.

A heli-portable RC drill was used to test anomalies previously identified from regional and detailed helimag geophysics. Olivut believes Seahorse may be the source of 18 macrodiamonds found in regional samples down ice to the west and for the positive indicator mineral chemistry found regionally.

Olivut also holds a 100% interest in its HOAM project in the Northwest Territories.

Pangolin Diamonds

Pangolin Diamonds (TSXV: PAN) began a Phase 1 drilling project at the MSC project in Botswana in October. MSC is a 10-sq.-km area within the company’s Malatswae project.

The drill program is following up on geophysical surveys and soil sampling that has now recovered 19 diamonds, including one macrodiamond. The company says it has recovered an unusually high number of diamonds from MSC, and that they’re concentrated in four different zones in the area, suggesting multiple kimberlite sources. Pangolin plans to drill at least five targets at the project, starting with percussion drilling, and if kimberlite is intersected in any of the holes, switching to core drilling.

The company raised nearly $850,000 in September.

RJK Explorations

RJK Explorations (TSXV: RJX.A) drilled two targets in March at the Bishop Nipissing diamond properties south of Cobalt, Ont. The claims were acquired in February from a prospector, Tony Bishop, who’s been looking for the source of the 800-carat Nipissing yellow diamond found in the area in the early 20th century.

RJK drilled a total of five holes for 559 metres. Drill results from the first target did not explain the geophysical target and further work may be done on the target after more sampling and geophysics work is completed. The second target returned “unique looking” core in three of four holes drilled. Results indicate a granitic breccia with no mantle material. RJK says additional work is necessary.

The company followed up the drill program with sampling and detailed geophysical work. RJK says the properties, totalling 20.9 sq. km, are located in a well-established kimberlite field within the Temiskaming Structural zone and contain at least 18 potential kimberlite pipes. It has drill permits for the locations of all potential kimberlite targets so far identified.

Talmora Diamonds

See Olivut Resources above.

Tango Mining

Tango Mining’s (TSXV: TGV) Oena diamond mine had its best quarter this year with 762.4 carats produced between May and August. The 339 diamonds were sold for an average price of US$1,346 per carat. Oena is an alluvial project in South Africa’s Northern Cape Province. Two contractors are at work on the project using eight pan plants to process run of mine material and tailings from previous operations.

Tango owns 43% of African Star Minerals, which holds 100% of Oena.

Tango will soon be renamed Southstone Minerals, a name change announced in July.

Tri-Origin Exploration

In October, Tri Origin Exploration (TSXV: TOE) has signed two exploration agreements with De Beers, paving the way for the diamond miner to conduct exploration and drilling on two of its properties.

The junior announced an agreement for its South Abitibi property in late September, and another for its nearby Nipissing Cobalt project, near Cobalt, Ont., in October. De Beers has identified targets on both properties, and the agreements allow the company to conduct preliminary drilling, and if kimberlite is found, to evaluate them for diamond content. Once the results of the programs are in-hand the companies would work out more comprehensive property earn-in agreements.

Both drill programs were expected to start in October.

Tsodilo Resources

Tsodilo Resources (TSXV- TSD) is planning to conduct a bulk sample at its BK16 project in Botswana. The company plans to extract 20,000 tonnes of kimberlite.

As part of a first phase large diameter drilling program, Tsodilo extracted 2,077 tonnes for an initial assessment of the quality and value of the BK16 diamonds. That program showed that BK16 has the potential to host diamonds of US$281 to US$792 per carat in value and confirmed the presence of Type IIa diamonds (3.8% of those recovered), as well as confirming the presence of special stones (10.8 carats and above). Size frequency distribution analysis indicates that 2-5% of contained carats could be specials.

The phase 2 bulk sample will be taken via surface sampling of a box-cut style design and should result in the recovery of 800 to 1,600 carats and allow Tsodilo to compile an inferred resource.

About 25 metres of overburden will be stripped to expose the kimberlite and the sample will reach a depth of 30-35 metres. Final design of the bulk sample and permitting are both under way.

Rio Tinto

Rio Tinto’s (TSX: RIO; NYSE: RIO) plan to deposit processed kimberlite into underground and open pit mine workings at Diavik is under review by the Mackenzie Valley Environmental Impact Review Board. The mine’s existing containment facility for processed kimberlite is expected to run out of space before the end of the mine life in 2025.

Diavik is operated by 60% owner Rio Tinto, with private company Dominion Diamond Mines holding a 40% stake.

Rio Tinto is also conducting exploration at Star Diamond’s Star-Orion South project (see page 20).

This article originally appeared in the November 2019 issue of Diamonds in Canada.


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